Toledo Owens Corning said first-quarter sales sunk 18 per-cent in its roofing sector but predicts a boost as weather improves.
Owens Corning reported a weaker than expected first quarter, but company officials said Wednesday they still believe they can meet the financial goals they set at the start of the year.
The Toledo company reported first-quarter sales of $1.3 billion, down 5 percent from last year. The biggest trouble spot was in roofing, where sales fell by 18 percent.
The company reported net income of $120 million in the quarter — more than five times what it reported last year — but that figure included several one-time items, the largest among them a $74 million tax benefit.
On an adjusted basis, the company said it earned $35 million, or 29 cents per share, in the quarter — unchanged from last year.
Analysts had been expecting earnings of 36 cents per share. In response to the miss, shares lost about 4 percent to close at $42.09.
Mike Thaman, the company’s chief executive officer, said OC had anticipated roofing volumes to be down about 10 percent in the quarter and slightly higher for the full year. While the company said margins on roofing materials remained solid, harsh weather in much of the United States and aggressive pricing from some competitors dragged on OC’s volumes more than expected.
Still, Mr. Thaman said he believes the company can make up the difference in the coming quarters and end the year on target.
“While the volume performance in the quarter puts our 2014 outlook for this business at some additional risk, we are maintaining our full-year view for the roofing market and believe that we can make good progress in the coming quarters to recover volumes that we did not ship in the first quarters,” he said on a conference call with analysts and investors.
Mr. Thaman does not expect the effects of winter to linger on the business as milder weather comes in.
On the positive side, the company reported generating higher sales figures for its insulation and composites business, even as volumes were flat in the quarter.
Mr. Thaman said the insulation segment should continue to benefit as the pace of residential construction picks up.
A price increase also will go into effect in June.
“We’re increasingly beginning to see those two businesses develop into the kinds of performers we know they can be,” Mr. Thaman said. “Insulation is coming out of four or five years of very challenging losses into a year of profitability in 2013 [and] now into first quarter profitability in 2014, which certainly speaks to continued improvement throughout the year. We have big expectations for what that business can do through a new construction recovery here in the U.S.”
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